CAUTIOUS POLICY

Dominion, Volume 31, Issue 69, 15 December 1937, Page 14

CAUTIOUS POLICY

Canterbury Frozen Meat Co.

CHAIRMAN’S SURVEY

By Telegraph.—Press Association

Christchurch, December 14

•■We have enjoyed for the last few years a succession of favourable trading seasons with only minor and temporary setbacks.”—Mr. John Deans, chairman of the Canterbury Frozen Meat-and Dairy Produce Export Company, Ltd., Christchurch. Mr. Deans, however, strongly emphasised the importance of the company building up its reserves. •‘I would,” he said, "sound a note of caution. T|ie history of this company, and. indeed, of most concerns engaged in the meat trade, shows that fortunes fluctuate very rapidly. "A very conservative policy is therefore necessary in order to avoid the repercussions of sudden rises and falls in the markets. Our past _ experience has shown us the wisdom of conserving our resources and building up reserves to meet such emergencies. In pursuit of this policy we propose, in addition to writing down our works and plant very considerably, to allocate £20,000 to the general reserve and slightly to increase the amount carried forward.

“We have been criticised in the past for having used our reserves to help in payment of dividends, but, to my mind, they are aecuinulated to enable ue to tide over bad times and to keep our ship on an even keel through both prosperity and adversity. We do not aim at paying large dividends because the policy of this company is, as was the reason for its formation as a farmers’ company, to provide its shareholders and the farmers of Canterbury with the means to freeze and market their fat stock to the best advantage. This same reason stands out more prominently to-day than ever. “We do, however, endeavour-to keep dividends steady, and we are proud of the fact that only once during the last 50 years have we missed giving our shareholders a return on their capital. Lamb Trade Prospects. “It is to-day more than ever difficult to forecast the prospects of the lamb trade for tho coming year. The role of the prophet is hazardous, and one would be very unwise, I think, at a time like the present to assume it. “We understand,” Mr. Deans continued, “that there will be an additional quantity of meat for consumption in England from all sources during the coming year; but if the provincial trade is there again increases in prices for lamb on the Home market should be somewhere about those we have had during the last season. “We gather that New Zealand may ship this season increased quantities of meat which might have an adverse effect, unless the trade on the Home market shows a corresponding increase in the present low prices of wool, pelts, and tallow, prices due very largely to the existing financial conditions in the United States of America.. The prices for these commodities naturally affect the price of lamb very considerably. “Last season the value of wool and skins was at least one-quarter of the total return from the carcass; to-day it accounts for less than one-tenth, so that one can see the vital effect that the price of wool has on the value of the lamb. “Stocks of wool are low and consumption in England is satisfactory, Mr. Deans continued, but until the full purchasing power of America and other buyers comes into play we shall have to be content with low prices. ■ “There is also such mistrust of general conditions that trade is naturally timid and buying is restricted to immediate requirements. “One is, however, always hopeful that the nations will return tq, sanity and to the realisation that under modern conditions the prosperity of one is essential to the well-being of the other “The greatest factor contributing to such-a return to common sense is, undoubtedly, the realisation of. Great Britain that without a strong Navy, Army, and Air Force her endeavours for peace, carried but little weight.” The report and balance-sheet of the company were adopted unanimously on the chairman’s motion, seconded by Air. Herbert Elworthy. The retiring directors Messrs. Norton Francis and Herbert Elworthy, were re-elected unopposed. MEAT FOR UNITED KINGDOM Heavy Shipments Of Lamb The Meat Board is advised by its London office that the shipments from Australia, South America and South A.nca to the United Kingdom during the month ol November were ns follows: — Australia: 53,473 carcases mutton; 1123,003 carcases lamb ; 88,884 quarters beef (frozen) ; 19,743 quarters beef, (chillSouth America: 16,989 carcases mutton' 437,317 carcases lamb; u4S4 quarters beef (frozen) ; 427.038 quarters beef Africa: 4555 quarters beef ( C from New Zealand to the United Kingdom for the same period were as follows: 22.780 carcases mutton; 158,451 carcases lamb; olid quarters bee* (frozen); 8486 quarters beef (chilled).